The approval of the defense spending bill called the National Defense Authorization Act (NDAA) may lead to the mainstream adoption of Blockchain technology by government agencies in the US. This is because the bill has a provision called the Modernizing Government Technology Act (MGT) that will allow the agencies to redirect their cost savings into internal working capital funds that can be utilized to modernize their IT systems.

According to Information Technology Industry Council Senior Vice President of Public Sector, Trey Hodgkins, the US Congress wants the various agencies to have their own discretion on how to invest their savings.

"Blockchain was clearly one of the technological capabilities that Congress meant for agencies to look at, and what they were trying to do was create dollars with some flexibility to them so that agencies would have their own discretion on what they invest in."

Brief details of the bill and the opinions of some industry players

Under the MGT provision, government agencies are authorized to spend their working capital funds for modernization initiatives falling in three categories, namely, migrating legacy systems to the cloud services, cybersecurity and other innovative and disruptive technologies and platforms.

Although it was not categorically stated in the bill, Blockchain technology is qualified as a potential direction for the allocation of funds for further advancement beyond the proof-of-concept stage at the agency level.

According to Hybrid Blockchain database provider ChromaWay’s Todd Miller, they are excited about the MGT Act due to its promotion of new technologies such as smart contracts and Blockchain.

"We are excited about the MGT Act because it provides incentives to federal agencies to move away from high-cost, low performing legacy systems toward new technologies, like Blockchain and smart contracts.”

The NDAA was already approved by both the House of Representatives and the Senate as of late November 2017. It is just awaiting the signature of US President Donald Trump to finally become law.